v  njijhnii 


THE  SOUTHERN  TELEGRAPH. 


in  1847-8,  charters  were  obtained  from  several  of  the  Southern  States  for 
the  construction  of  a  line  of  telegraph  from  Washington  City  to  New  Or- 
leans. Delegations  from  these  several  corporations  subsequently  met  at 
Washington  and  organised  a  company,  and  the  necessary  steps  were  taken 
to  effect  the  object  of  their  organization.  An  arrangement  wasentered  into 
with  S.  F.  B.  Morse,  Amos  Kendall,  and  F.  O.  J.  Smith,  patentees  of  the 
Morse  Telegraph,  for  the  use  of  their  instruments,  in  consideration  of  which, 
*an  amount  of  stock  equal  to  the  cost  of  construction  was  issued  to  them, 
thus  giving  them  a  moiety  of  interest  in  the  earnings  of  the  line.  The  num- 
ber of  shares  were  11,130,  of  which  the  patentees  held  5,565. 

Daniel  Griffin,  of  Ga.,  was  the  first  President,  Elam  Alexander,  of  Ga*, 
second,  Smith  Mowry,  of  S.  C,  third. 

During  these  three  years,  the  line  was  unprofitable,  owing  to  imperfec- 
tions of  construction,  &c,  but  towards  the  close  the  difficulties  were  sur- 
mounted, and  the  line  began  to  pay  a  dividend. 

At  the  fourth  annual  meeting,  the  representatives  of  the  patentees  cast 
their  entire  vote,  being  a  moiety  of  the  whole,  for  Amos  Kendall,  as^resi- 
dent,  and,  as  some  of  the  individual  stock  was  unrepresented,  he  was,  of 
course,  elected.  Much  dissatisfaction  was  felt  and  expressed  by  the  stock- 
holders at  this  action  of  the  patentees,  and  was  denounced  as  a  breach  of 
faith  ;  as,  at  the  origin  of  the  company,  it  was  said  to  have  been  expressly 
understood  that  the  management  of  the  line  was  to' rest  in  the  stockhold- 
ers, while  the  earnings  were  to  be  equally  divided  with  the  patentees.  Mr. 
Kendall  was  elected  several  times,  appointing,  in  the  meantime,  his  nerhew 
and  sons  as  Treasurer,  Superintendent,  &c.  It  is  alleged  that  during  hie 
administration  there  were  changes  of  operators  made  at  various  statioae, 
by  which  Northern  men  were  substituted  for  Southern,  without  apparont 
cause. 

About  this  time  the  "  House  *  and  "O'Riley  "  lines  of  telegraph  were  in 
active  rivalry,  and  competition  with  the  Kendall  and  Morse  line  on  the 
routes  running  from  Washington  to  the  Northern  cities.  Disputes  and 
collisions  frequently  occurred,  litigation  followed,  accompanied  by  muck 
trouble  and  expense.    This  was  terminated  by  the  union  of  the  rival  inter- 


2 

ests  in  what  was  denominated  the  "Magnetic  Telegraph  Company,"  of 
which  Mr.  Sanford,  of  New  York,  was  made  President,  and  John  E.  Ken- 
dall, (son  of  Amos,)  general  superintendent.  At  the  next  annual  meeting 
of  the  Washington  and  New  Orleans  Company,  it  was  determined  to  lease 
the  line  to  the  Magnetic  Telegraph  Company.  The  latter  company  stipu- 
lating to  pay  the  stockholders  of  the  former  sis  per  cent,  per  annum,  on 
their  investments.  In  1859,  the  Magnetic  Telegraph  Company  was  merged 
in  the  American  Telegraph  Company,  to  which  the  lease  was  transferred. 

This  arrangement  continued  until  April,  1861,  when  the  Lincoln  govern* 
ment  destroyed  the  telegraph  lines  between  Washington  and  Alexandria. 
Two  days  afterwards  it  was  announced  in  the  Richmond  papers,  that  a  sepa- 
ration of  the  Northern  and  Southern  telegraph  lines  had  taken  place,  and 
that  Dr.  Morris  was  elected  President,  and  Mr.  Dowell,  Superintendent,  of 
the  Southern  line.  No  information  was  given  when,  where,  and  by  whom 
the  election  was  made,  or  by  what  authority  the  lines  were  declared  to  .be 
separated.  Certainly  there  was  no  meeting,  or  conference,  or  consultation 
of  the  Southern  stockholders.  Dr.  Morris  did  not  own  one  dollar's  worth 
of  stock  in  the  Southern  line,  nor  is  it  believed  did  Mr.  Dowell.  The  latter 
was  for  years  a  favorite  superintendent  of  Amos  Kendall,  and  it  was  imme- 
diately after  his  arrival  from  Washington,  that  the  new  organisation  wao 
announced  to  the  public. 

It  will  be  recollected  that  about  the  time  this  separation  was  announced; 
that  the  Lincoln  government  were  loud  in  their  threats  of  sequestrating 
Southern  property,  and  in  gome  instances  carried  them  into  effect.  The 
Northern  holders  of  property  in  the  Southern  States,  apprehensive  of  retal- 
iatory measures,  endeavored  to  protect  themselves  by  putting  such  property 
under  the  control,. nominally,  of  persons  residing  in  the  South.  Thus  the 
Adams  Express  Company,  of  which  Mr.  Sanford.is  Vice-President,  and  the 
actual  manager,  was  at  once  announced  to  be  divided  into  a  Northern  and 
Southern  Company;  though  if  an  investigation  is  had,  there  is  good  reason 
to  believe  that  the  stock  will  be  found  to  be  owned  by  the  old  holders, 
though  a  portion  of  it  may  be  nominally  transferred  to  enable  certain  gen- 
tlemen in  the  South  to  act  as  Directors.  Mr.  Sanford  is  also  President  of 
the  American  Telegraph  Company,  and  the  same  remedy  probably  suggest- 
ed itself  to  him  to  meet  the  difficulty  in  both  eases. 

In  July,  1861,  a  meeting  of  the  Charleston  stockholders  was  held  for  the 
purpose  of  taking  measures  for  there-organization  of  the  Washington  and 
New  Orleans  Telegraph  Company.  A  committee  was  appointed,  who  re* 
ported  at  a  subsequent  meeting  that  they  had  been  waited  on  by  Dr.  Mor- 
ris and  Mr.  Dowell,  who  represented  to  them  that  their  action,  in  assuming 
the  control  of  the  line,  was  prompted  by  a  regard  for  the  interest  of  the 
stockholders,  and  it  was  their  determination  to  pay  out  of  the  earnings  of 
the  line,  six  per  cent,  annually  to  the  stockholders,  and  the  surplus,  if  any, 
to  be  given  those  who  may  be  legally  declared  to  be  entitled  to  it.  The 
meeting  declined  to  take  any  action  on  the  propositions  of  Messrs.  Morris 

nd  Dowell,  and  appointed  Delegates  to  a  general  meeting  of  the  stockhold- 
>f  the  Washington  and  New  Orleans  Telegraph  Company,  to  be  held  a^ 


3 


Augusta  on  the  27th  of  August,  1861.  This  was  duly  held  ;  a  majority  of 
theaSoutbern  stock  being  represented.  Elam  Alexander,  of  Macon,  was 
called  to  the  chair,  and  Mr.  J.  C.  Butler  acted  as  secretary.  Dr.  Morns, 
the  acting  President,  was  present,  and  after  a  detailed  statement  of  the  ope- 
rations of  the  line,  and  the  condition  of  the  property,  he  read  a  series  of 
^solutions,  which  had  been  adopted  at  a  meeting  of  the  stockholders  of 
the  American  Telegraph  Company,  resident  in  the  Confederate  States, 
which  was  held  at  Richmond,  Va.,  on  the  23d  July,  1861.  These  resolu- 
tions were  to  the  following  points:  That  the  stockholders  of  the  American 
Telegraph  Company  residing  in  these  States,  take  possession  and  control  of 
its  lines  located  therein,  and  manage  them  for  the  benefit  of  such  stock- 
holders exclusively.  That,  in  thus  assuming  the  control  of  the  property 
and  ri  :tly  shared  and  managed  by  their  associates  in  the  American 

,  , any,  the  stockholders  composing  the  Richmond  meeting, 
■r  nearly  every  .hare  of  stock  held  by  Southern  stockholders  in 
the  American  Telegraph  Company,  considered  it  but  just  to  all  parties  re-  > 
riding  in  the  Confederate  States  with  whom  the  said  parties  have  contracts 
Of  any  kind,  to  declare  their  willingness  and  purpose,  in  good  faith,  to  com- 
ply with  all  such  contracts  on  their  part,  expecting  such  parties,  in  like 
manner  to  comply  with  all  such  contracts  on  their  part,  and  that,  assuming 
the  position  indicated  in  their  resolutions,  the  stockholders  composing  the 
meef  imed  ill  wish  or  intention  to  manage  the  affairs  of  the  com- 

pany deprive  any  one,  their  late   associates  (the   Northern  stock- 

holders of  the  company  included)  of  any  of  their  legal  rights  in  the  premi- 
ses, but  assume  the  control  and  management  mentioned,  implied  by  a  sense 
of  duty  to  the  public  and  themselves. 

The  Richmond  meeting  alluded  to  then  proceeded  to  elect  Dr.  Morris  ' 
President  of  the  company,  at  a  salary  of  $5,000  per  annum,  and  Mr.  Wynne 
the  Treasurer,  at  a  salary  of  $1500  per  annum.  They  declared  a  dividend, 
and  took  measures  for  carrying  into  execution  the  plan  proposed.  Having 
done  which,  they  adjourned  to  meet  in  Richmond  on  the  20th  of  August, 
1861. 

It  will  be  recollected  that  the  American  Telegraph  Company  was  a  North- 
ern incorporation/having  no  legal  right  in  the  Confederate  States,  nor  could 
its  individual  stockholders  residing  in  the  Confederate  States,  assume  to 
themselves  rights  or  powers  which  could  not  be  exercised  by  the  original 
company  The  action  of  the  Richmond  meeting  will  appear  the  more  pre- 
posterous and  absurd,  when  it  is  known  that  the  persons  present  repre 
sented  only  6 19  shares  out  of  the  many  thousands  which  comprise  the  Amer 
ican  Telegraph  company. 

Th  9ta  unanimously  adopted  resolutions  declining  to 
acquiesce  in  the  action  of  the  Richmond  meeting,  declaring  that  the  stock- 
holders of  the  Washington  and  New  Orleans  Company  have  a  sincere  de- 
sire   it    , .tie.  to   harmonise    the  interests  of  all  the  lines  of  telegraph 

witn-in   t|  .nfedermcy,  and  appointing  a  comnfittee  of  three  to 

OOnfe?  with  the  stockholders  of  the  American  Telegraph  Company  in  Kiel 
mond   on  the  20th  September,  1362,  and  with  all  others  interested,  i 


yiew  to  the  amalgamation  of  all  the  lines  in  the  Confederate  States  ;  provided, 
such  amalgamation  can  be  consummated  during. a  period  not  exceeding  two 
years  from  the  date  of  agreement. 

A  committee,  consisting  of  Messrs.  Gourdin,  Porter  and  Mowry,  were  ap- 
pointed for  this  purpose,  and  had  several  conferences  with  the  gentlemen 
in  Richmond,  purporting  to  represent  the  Southern  stockholders  of  the 
American  Telegraph  Company,  but  failed  in  coming  to  any  agreement,  the 
pretensions  of  the  latter  being  deemed  utterly  inadmissible  by  the  former. 
Indeed,  had  they  harmonized  in  their  views,  it  is  difficult  to  perceive,  how 
any  legal  adjustment  could  have  been  effected  by  the  parties,  as  neither  of 
them  had  the  authority  necessary  for  that  purpose.  The  Richmond  gentle- 
men represented  but  an  inconsiderable  fraction  (619  shares)  of  the  Ameri- 
can Telegraph  Company,  a  Northern  incorporation  without  legal  existence  in 
the  Confederate  States,  and  whose  rights  of  property,  if  any  exists,  are  pro- 
perly the  subjects  of  the  sequestration  act.  On  the  other  hand,  the  Augusta 
convention  of 'the  Southern  stockholders  of  the  Washington  and  New  Or- 
leans Telegraph  Company,  represented  only  a  minority  of  the  capital  clock, 
not  more  than  two-fifths  of  it  being  known  to  be  held  in  the  Confederate 
States,  the  other  three-fifths  being  owned  by  the  patentees  of  the  tell  grapb 
and  other  Northern  holders,  and  the  action  of  this  convention,  therefore,  or 
of  its  committee,  could  be  neither  autnoritative  or  binding  on  the  company. 
A  similar  disability  will  continue  until  some  action  is*taken  by  the  govern- 
ment, in  reference  to  the  stock  held  by  aliens,  under  the  sequestration  act 
or  otherwise,  so  that  it  may  be  represented  in  the  meetings  of  the  company* 

From  the  foregoing  facts,  I  am  led  to  the  following  recapitulations  and 
additions.  The  whole  amount  of  stock  in  the  Washington  and  New  Orleans 
Telegraph  line,  as  originally  organized,  is,  11,130  shares.  This,  at  $50  per 
share,  amounts  to  $556,500.  Of  this  amount,  3,560  shares  were,  on  inves- 
tigation, found  to  be  owned  by  parties  residing  in  the  Confederate  States, 
as  reported  by  the  present  managers  of  the  lines  on  their  assumption  of  the 
same.  Subsequently  the  Hustings  court  for  the  district  of  Richmond,  Va., 
decreed  200  shares  to  Edwin  T.  K.  Culver,  and  William  K.  Culver,  making 
an  aggregate  of  3,760  shares,  owned  in  the  Confederate  States.  This 
Southern  interest,  when  substraeted  from  the  whole  amount  of  stock,  leaves 
7,370  shares  owned  by  parties  outside  of  the  Confederacy.  I  speak  only  of 
the  Washington  and  New  Orleans  line. 

The  amount  now  owned  in  the  Confederate  States,  in  dollars  and  cents* 
is  $1,858,000.  Upon  this  (excepting  a  nominal  amount,  as  stated  by  the 
present  treasurer,)  the  present  managers  are  paying  six  per  cent,  rents, 
under  the  provisions  of  the  lease  of  the  Washington  and  New  Orleans  lines, 
to  the  American  Telegraph  Company,  amounting  to  $11,280  per  annum. 
This,  from  January  1st,  1861,  to  January  1st,  1863,  amounts  to  $22,560, 
which,  I  presume,  has  been  paid  to  the  Southern  stockholders. 

As  above  stated,  the  aggregate  amount  of  stock  held  in  the  Washington 
and  New  Orleans  line,  by  parties  outside  the  Confederacy,  is  7,370  shares, 
amounts  to  $368,500.  This,  at  six  per  cent,  per  annum,  amounts  to  $22,110, 
or  $44,220  from  Jan.  1st,  1861,  to  Jan.  1st,  1863. 


Giving  the  present  officers  of  the  lines  the  benefit  of  their  own  statements, 
made  in  their  circular  of  July  25th,  1862,  that  the  rents  accruing  from  Jan. 
1st  to  April  1st,  1861,  were  drawn  by  the  Northern  Treasurer,  amounting 
to  $2,820.  This,  subtracted  from  the  $44,220,  leaves  $41,400  of  ronts  at 
six  per  cent,  now  in  the  hands  of  the  Treasurer,  Mr.  Wynne,  belonging  to 
parties  outside  of  the  Confederacy  ;  all  of  which  sum,  together  with  the  cap- 
ital stock,  is  properly  the  subjects  of  sequestration  by  the  Confederate 
court.  * 

But  I  will  assume  a  broader  basis  of  receipts  arising  from  the  operations 
of  the  Washington  and  New  Orleans  line,  since  the  secession  of  Virginia, 
and  the  management  of  the  lines  under  the  existing  organization,  drawn 
from  both  the  written  and  verbal  statements  of  gentlemen,  some  of  whom 
had  been,  and  others  were,  at  the  time,  connected  with  the  practical  opera- 
tions of  the  lines. 

One  of  these  gentlemen,  to  whom  I  have  referred,  stated  to  me  by  letter, 
in  May  last,  that  "from  the  best  information  he  had  been  able  to  get,  that 
the  line  was  paying  some  forty  per  cent,  over  expenses."  And  still  another 
gentleman  writing  to  me  from  a  distant  point  on  the  same  subject,  and 
about  the  same  time,  said  :  "  In  these  times  this  line,"  (for  he  was  then  con- 
nected with  it,)  "  instead  of  paying  six  per  cent,  to  the  legal  stockholders, 
should  yield  twenty  or  twenty-five  per  cent."  I  will  then  assume  the  lowest 
of  these  estimates  to  be  the  fact,  and  that  the  line  has  been  paying  twenty 
per  cent,  dividends  from  April  1st,  1861,  to  Jan.  1st,  1863,  a  period  of  21 
months,  and  we  have  the  sum  of  $194,775.  From  this  we  will  deduct  the 
sum  total  of  rents  paid  Southern  stockholders,  and  we  have  the  large  sum 
of  $172,215,  now  in  the  hands  of  Mr.  Wynne,  the  present  Treasurer,  as  divi- 
dends accruing  on  stocks  not  represented  by  parties  in  the  Confederate 
States,  and  which,  under  the  plea  of  assuming  the  management  of  the  con- 
solidated lines  fi.»r  the  benefit  of  the  Southern  stockholders  in  the  American 
Telegraph  Company,  exclusively,  gives  to  each  stockholder  of  the  619  shares 
represented  in  that  company,  in  the  Confederate  States.  $378  to  the  share, 
for  a  period  of  21  months.  But  assuming  that  six  per  cent,  of  rents  on  the 
capital  stock,  amounting  to  $41,400,  is  now  held  by  the  treasurer,  subject 
to  the  decision  of  the  sequestration  court,  and  we  have  the  sum  of  si;;0,Xl5, 
to  be  divided  among  the  619  shares  of  American  stock,  or  a  fraction  short 
of  $212  to  the  share,  for  the  period  of  21  months,  to  say  nothing  of  divi- 
dends arising  from  the  workings  of  their  own  lines. 

Again,  assuming  the  fact  that  upon  the  secession  of  the  Southern  States, 
and  their  organization  into  a  Confederate  government,  and  the  declaration 
of  war  by  the  government  of  the  United  States,  all  civil  and  corporate  con- 
tracts existing  between  parties  in  the  two  sections  were  either  abrogated  by 
Confederate  law,,  or  were  rendered  so  by  virtue  of  the  existence  of  the  war  be- 
tween the  two  sections.  This  being  so,  it  follows  that  the  property  in  the 
Washington  and  New  Orleans  lines  of  telegraph  reverted  back  io  its  original 
condition  of  separate  independence,  and  the  control  and  management  of 
which  should  have  been  under  its  former  directors,  or  a  new  board  of  direc- 
tors, which  should  have  been  chosen  by  its  Southern  stockholders  in  the 
early  part  of  the  year  1861. 


6 

Now,  suppose  this  to  have  been  done,  as  it  should  have,  and  the  lines 
then  worked  in  a  consolidated  form  as  they  have  been,  and  even  under  the 
auspices  of  its  present  managers,  (for  I  have  no  desire  to  dispossess  them  of 
its  control  when  properly  chosen,)  with  the  understanding  that  the  stock- 
holders were  to  receive  pro  rata  of  the  nett  earnings  of  their  line,  reserving 
the  dividends  of  the  foreign  stocks  as  a  proper  matter  of  confiscation,  and 
its  results  would  have  been  far  more  equitable  to  the  Southern  stockholders, 
who  have  the  highest  moral  and  legal  right  to  every  advantage  and  benefit 
of  the  workings  of  their  own  property.  Were  this  the  case,  the  Southern 
stockholders,  instead  of  receiving  six  per  cent,  rents,  would  now  be  receiving 
20  or  30  per  cent,  per  annum  dividends. 

It  was  from  an  assumption  of  the  foregoing  facts,  that  the  s^pckholders 
residing  in  the  Confederate  States,  at  a  meeting  held  in  Augusta,  Ga.,  on 
the  9th  of  August,  1862,  resolved  to  take  such  steps  as  would  enable  them 
to  obtain  control  of  their  property  at  the  shortest  possible  period,  and  to 
this  end  required  the  present  managers  (Messrs.  Morris,  Wynne  and  Dow- 
ell,)  to  keep  a  separate  account  of  the  earnings  and  disbursements  of  their 
line  from  the  first  of  September,  1862,  to  the  second  Wednesday  in  Janu- 
ary, 1863,  and  to  report  the  same  to  a  meeting  of  the  stockholders,  to  be 
holden  on  the  aforesaid  second  Wednesday  of  January,  1863,  in  the  city  of 
Augusta,  Ga.  This  meeting  of  stockholders  was  duly  held,  (Dr.  Morris 
present,)  and  it  was  agreed  that  no  decisive  and  definite  action  could  be 
had  until  the  alien  interest  in  said  line  was  sequestrated,  and  the  status  of 
the  Government's  interest  established  by  the  court,  the  property  taken  pos- 
session of  by  the  agents  of  the  Government,  or  turned  over  to  the  stockhold- 
ers residing  in  the  Confederate  States,  thus  enabling  them  to  effect  an  or- 
ganization under  the  new  dispensation  of  things  with  all  interests  fairly 
represented.  To  this  end  the  meeting  of  stockholders  of  the  14th  of  Janu- 
ary, 1863,  resolved  to  employ  counsel  at  Richmond,  Va.,  to  look  after  its 
interests,  and  to  urge  the  sequestration  of  the  alien  stock  in  the  company. 

Thus  matters  stand,  and  with  but  a  dim  prospect  of  an  early  action  upon 
the  part  of  the  sequestration  court,  for  the  sequestration  of  the  alien  inte- 
rest, as  I  am  informed,  by  the  Confederate  States  Receiver;  thus  keeping 
the  stockholders,  residing  in  the  Confederate  States,  out  of  both  the  posses- 
sion and  the  earnings  of  their  property,  and  allowing  the  stockholders  in 
the  American  Telegraph  Company,  owning  only  619  shares,  to  amass  vast 
fortunes  at  the  expense  of  the  Southern  stockholders  in  the  Washington 
and  New  Orleans  line.  This  ought  not  so  to  be,  and  if  the  court  is  not  pre- 
pared to  act  in  the  premises,  and  that  speedily,  I  would  respectfully  call  the 
attention  uf  Congress  to  the  matter,  as  one  on  which  they  should  take  some 
immediate  action. 

I  have  said  there  were  7,370  shares  of  the  Washington  and  New  Orleans 
company's  stock,  owned  by  parties  outside  of  the  Confederacy,  and,  of 
course,  owned  by  alien  enemies,  and  subject  to  sequestration.  I  say  alien 
enemies,  because  Amos  Kendall,  though  residing  in  the  District  of  Colum- 
bia, is  at  war  with  the  Confederate  States,  by  giving  aid  and  comfort  to  the 
enemy  ;  and  hence  not  entitled  to  the  benefits  of  the  law  exempting  parties 
residing  in  the  excepted  States. 


In  tbe  fall  of  1860,  at  a  meeting  of  the  stockholders  of  the  American  Tel- 
egraph Company,  held  in  the  City  of  Washington,  Mr.  Kendall  represented 
in  his  own  right  1,772  shares  of  stock  in  the  Washington  and  New  prleans 
line,  and  some  six  hundred  shares  by  proxy,  the  same  belonging  to  bis 
children  and  grand-children,  making  in  all  2,372  shares.  Two  hundred 
sharos  of  this,  however,  tms  since  been  decreed  by  the  Hustings  court  for 
the  City  of  Richmond,  as  heretofore  stated,  to  the  heirs  of  Amos  Kendall, 
residing  in  the  Confederate  States,  leaving  2,172  shares  to  be  deducted  from 
the  whole  amount  of  alien  stock,  and  this  would  leave  5,198  shares  belong- 
ing  to  parties  known  to  reside  beyond  those  States  exempted  by  the  act  of 
Beqoestration,  which  should  be  sequestrated  to  the  use  of  tbe  Government, 
and  Mr.  Kendall's  stock  turned  over  to  his  heirs  residing  in  the  Confederate 
States,  in  compliance  of  the  act  of  sequestration  passed  February,  18G2. 

C  P.  CULVER. 
Bersdia,  Ga.,  January  2bih,  18G3. 


Hollinger  Corp. 
PH8.5 


